Britain's best-known fund manager, Anthony Bolton of Fidelity, is to retire next year with his reputation as a legendary investor "tarnished" by the relative failure of his £460m China fund.

Bolton, 63, will step down in April 2014 and be replaced by Dale Nicholls, currently manager of Fidelity's Pacific funds.

Known as the kingmaker in several multibillion pound City deals, Bolton shot to fame in 2003 when he orchestrated the sacking of Michael Green, then chief executive of Carlton Communications, earning him a title he loathes: the Quiet Assassin.

He became the most successful investor of his generation, with his Special Situations fund earning a huge and loyal following among small investors. But his China Special Situations fund, which raised £460m amid huge fanfare in 2010, has failed to repeat that success.

Nearly 100,000 investors who bought at £1 a share – and saw some of that go to financial advisers in a much-criticised commission deal – are still nursing losses of 14% three years later, with the trust currently trading at 86p a share.

In April 2010 Bolton hailed China as the "investment opportunity of the next decade" but the performance of the country's stock market has been poor almost ever since. The China fund sector is the worst performing of all sectors in the past three years, registering a loss of 0.6%. This compares, for example, with gains of 40% for UK equity funds, 39% for US equities and 35% for European equities. "Worse still is that Bolton's trust has significantly under-performed many other Chinese funds," said Patrick Connolly of advisers Chase de Vere, adding "we never recommended it to our clients."

After his retirement in April 2014, Bolton will continue as an adviser to Fidelity and a trustee of its charitable foundations.

Mark Dampier, head of investment research at Hargreaves Lansdown, which was among the promoters of the fund, said: "Anthony has had a fantastic career; he is rightly regarded as one of the best active managers of recent decades. His China fund's performance in recent years has tarnished this record slightly, though it has shown signs of recovery in the past year."

Little is known of Bolton's own personal fortune. As an employee, he has shared in the income stream from the funds, which in the case of the China fund is worth around £5-6m a year. But his personal wealth is much greater, and tied up in his holdings of 'career shares' in the group. Fidelity is a privately held company, still effectively controlled by the Johnson family, who founded the firm in the US in 1949. Bolton joined Fidelity's UK operation in 1979, and was among the few senior managers to be invited to buy shares in the company, which will now be worth many millions of pounds. These do not vest in their entirety until the senior manager departs.